Introduction
Ethical leadership is a style that exemplifies acceptable conduct and demonstrates respect for moral values, ideologies, and beliefs, as well as the rights of others. This style embodies trust, consideration, fairness, honesty, and charisma. An individual’s ethics are the sum of the values and morals they find desirable and appropriate. Ethical leaders often have a strong sense of personal values and a deep commitment to doing what is right, even when it may be difficult or unpopular. Ethical leadership involves making decisions based on principles that prioritize the well-being of all stakeholders involved.
Ethical Leadership Principles
Ethical leadership encompasses six core values that serve as guiding principles. The values comprise the FATHER framework, an acronym for fairness, accountability, trust, honesty, equality, and respect (Sarwar et al., 2020). Fairness is the core of human interactions and expectations on how to treat others. Leaders are expected to treat others fairly without favoritism toward specific individuals.
Fairness allows leaders to allocate resources to each employee based on their needs. Second, an individual’s moral fiber is evident in accountability or transparency. Ethical leaders hold themselves accountable for their good or bad actions. This means that they are willing to admit when they have made a mistake, apologize if necessary, and take steps to rectify the situation.
Third, ethical leaders must establish trust between themselves and their employees. Relationships are built on trust, without which they would fall apart. A leader should rely on his team’s integrity; without this, the team will fail and become disruptive (Sarwar et al., 2020). Fourth, honesty is the ability to discuss openly and truthfully, without lying, with those in power or those under one’s leadership. There is a direct relationship between honesty and truth, as honesty directly informs the latter. Leaders who cannot be honest with their followers do not trust them enough to handle the truth.
Equality is among the most important aspects of ethical leadership, as it addresses various organizational problems. It is core to the survival of human life and happiness. Inequality creates an organization where some individuals have more access to resources such as employment opportunities, promotions, higher salaries, and office equipment than others (Sarwar et al., 2020).
Respect is the last of the six principles in the framework. It is a positive feeling or attitude of esteem and admiration towards someone or something (Sarwar et al., 2020). It involves acknowledging and valuing the worth of others, their dignity, and their inherent humanity. In the context of ethical leadership, respect is a crucial component in creating a positive and productive work environment. Leaders who show respect to their team members demonstrate that they value their contributions, opinions, and perspectives.
Theories
Ethical leadership can be explained using social learning and exchange theories. The social learning theory posits that ethical leaders serve as role models, paving the way for their followers (Chuang, 2021). They demonstrate to their followers how to behave and instruct them in the correct behaviors based on the principles of ethical leadership. For example, an ethical leader becomes a role model to the followers by following and observing ethical guidelines in the workplace. Through this, employees will likely emulate the leader and shape their actions to match the leader.
Social learning involves obtaining knowledge from the social environment. As the name suggests, the social learning theory is about individuals learning from other community members (Ahn et al., 2020). The workplace is an example of a social setting with groups of individuals, including leaders and followers. As such, employees will always look up to their leaders and make decisions based on their leaders’ actions. For example, a leader who reports late cannot encourage employees to report early; the employees will always be late. On the other hand, respectful leaders will encourage their employees to possess these traits and transform their work environment as a result.
The social exchange theory states that the effects of ethical leadership are explained through transactional exchanges between leaders and their followers. The theory posits that employees will match their leaders’ actions and behaviors (Meira & Hancer, 2021). The relationship between employees and leaders is reciprocal. For example, employees will always treat leaders in the same way that leaders treat them. Leaders who respect and are honest with their employees encourage employees to be respectful and honest. The leader determines the transaction between employees and leaders. Leaders set the pace of the transaction, and thus, ethical leaders will always encourage ethical followers.
Application of Ethical Leadership
Leaders exhibit ethical leadership through the duty-based approach and the utilitarian approach. The duty-based approach focuses on an organization’s duty to the most critical stakeholder (Nygaard, 2022). Organizations are sometimes led by their duties to their employees, consumers, or shareholders. An example of this was during the US recession, when leaders in the automation industry showed ethical leadership toward shareholders.
The US workforce has minimal employment rights, making it easy for General Motors and Chrysler to lay off their employees (Jackson et al., 2020). The companies required a government bailout to weather the harsh economic conditions of increased unemployment and labor force reductions. The company had to make callous decisions that could potentially result in bankruptcy.
For example, laying off staff resulted in low productivity, which could translate to lower sales revenue and increased losses. The companies would only be able to stay open if they had constraints on their financial resources (Jackson et al., 2020). Despite knowing this, they laid off their employees because, at the time, the most important stakeholders were shareholders. The company’s leadership had to make an ethical decision that would change many lives while safeguarding the financial resources and capital required to save the company.
The utilitarian approach is evident in the German market. The German market expects employers to pay a severance package when they lay off their employees. During the recession, German car assemblers asked employees to shift to part-time employment to avoid mass unemployment (Weishaupt, 2021). Through this, the companies reduced their labor costs because the employees did not work full-time
Furthermore, the assemblers sought to avoid situations that would cause social pain due to unemployment. The employees accepted an income reduction instead of losing their jobs. The approach ensured all stakeholders benefited by adopting a solution that favored all. The utilitarian approach is a practical expression of ethical leadership. Ethical leadership is evident in organizations in various aspects. Ethical leaders help their employees when they can (Sharma et al., 2019).
For example, a leader working in a hotel can decide to help the staff when they are busy. Employees will likely notice the leader’s efforts and appreciate the help. Ethical leadership manifests when a leader goes beyond their job description and notices that employees are struggling with their duties. The willingness to help will encourage the employees to be helpful to others. As the social learning theory indicates, employees learn from their leaders; ethical leaders create a sustainable, ethical culture in their organizations by leading by example.
Conclusion
Ethical leadership impacts an organization in various ways, enhancing individuals and groups. As indicated in the example above, the morale of the hotel employees changes when the leader helps them with their duties. Ethical leadership encourages productivity because ethical leaders are role models. The health of an organization also changes under this kind of leadership. Employees are more likely to maintain a positive attitude towards their work if their leaders are ethical. They are encouraged to work because they are treated fairly and respectfully. Ethical leadership influences its relationships with employees or followers and shapes the future of its organization.
References
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